When will corporations and politicians begin fulfilling their social responsibility? With the rise of the "woke capitalism" movement, this may become a reality.
“Woke capitalism”ーan incipient movement within the corporate world in which corporations are entailed to pursue social justiceーis what our broken society is in dire need of. At the 2020 World Economic Forum in Davos, this was a predominant theme throughout the conference. Indeed, Tim Wu, a professor at Columbia Law School, asserted in the New York Times that even Phillip Morris, the world’s largest tobacco manufacturer, is “dedicated to a smoke-free future”. A group of next-generation “change-makers”, from Naomi Wadler, a 13-year-old anti-gun advocate, to Greta Thunberg, a 17-year-old climate activist, made their debut and took center stage at this forum to contribute to the fledgling social movement. This is the public’s response to the long-held greed by corporations and politiciansーthe need for these traditional stakeholders to fulfill their social responsibility has never been greater.
Mark Zuckerberg, Bill Gates, and Steve Jobs are few of a manifold college-dropouts who later became multi-billionaires, with the founding of tech giants Facebook, Microsoft, and Apple, respectively. Concurrently, in recent years, there have been many much-hyped start-ups hoping to once again capture the imagination of investors. However, there have been ensuing misfires, notably the Theranos and WeWork debacles.
In 2003, Elizabeth Holmes, a Stanford dropout, founded Theranos, a start-up that promised unprecedented comprehensive blood tests that merely required a drop of blood. Yet, she, who was formerly believed to change the world, becoming the youngest self-made female billionaire in 2014, was indicted with federal wire fraud charges in 2018. Despite receiving a $600 million funding, she made fraudulent claims about the technology, deceiving ample investors, doctors, and patients.
In 2019, the spotlight was shed upon Adam Neumann, the founder and CEO of WeWork at the time, a co-working space company. WeWork’s fast-growing success can be ascribed to the newly-recognized merits of co-working, as well as Neumann’s profound confidence and charisma. Once deemed to be the most valuable startup worth $47 billion, operating in 528 offices across 29 nations, is now heading for bankruptcy at an unparalleled pace. Despite the putative prosperity, the September 2018’s release of public filings prior to the Initial Public Offering (IPO) emanated concerns and suspicions among investors and analysts. The public filings confirmed not only the high-risk business model but also the speculations swirling around Neumann’s character. Behind the veneer, Neumann was a walking disaster. A former employee testified about his arbitrary attitude: “No one wanted to get in his way; you would either get berated or humiliated or asked to do some impossible task”. He hosted lavish parties after announcing a mass layoff and purchased a $60 million company jet despite losing $1.6 billion that year. What’s more, he had the company pay him $5.9 million to utilize his trademark, “We”, based on third-party appraisal, and attempted to smuggle marijuana in his private jet into Israel, misleading the pilot and crew into international drug trafficking. Neumann’s avarice and egocentrism consuming the entirety of his conscience.
While much media attention has been devoted to sensational stories of venture capitalism gone awry, a conspicuous manifestation of the pervasive greed to find the next Facebook, Microsoft, or Apple, there are forces at work set about to enforce a more benign form of capitalism. The adherence to woke capitalism at the heart of the business is what distinguishes prosperous start-ups from Theranos and WeWork. The motive of a corporation should not merely be pecuniary, but also encompass social responsibility, including volunteerism, the welfare of employees and the sustainable protection of the environment that is based on certain ethical principles. Nevertheless, both Holmes and Neumann turned a tactful blind eye to their respective social responsibility and succumbed to egotism and cupidity.
Establishments have been increasingly responded to this social movement. In the recent DAVOS 2020 forum, household names were seemingly becoming “woke” to climate change. Critics may deem this as a classic example of “all talk, no action”; however, a stimulating conversation is progress in itself from unmitigated denialism. Furthermore, politicians are turning into catalysts for this pivotal phenomenon, with this being an ongoing pre-eminent tone in the 2020 US Presidential elections campaign. Crowded Democratic primary season candidates, from Elizabeth Warren and Bernie Sanders to Andrew Yang, have encompassed this into their vision. While the former has addressed the perpetual economic disparity by targeting private equity firms, banks, enterprises and the affluent, the signature policy of the latter has been the universal basic income proposal, a constituent of his “human-centered capitalism” vision. Although the US continues to be more divided than ever, woke capitalism is something we all can endorse.